Oct 25, 2018

The Big Lie: Why the Media Industry Is Suing Facebook Over Its False 'Pivot-To-Video' Metrics

Given the seemingly endless accumulation of transgressions, can Mark Zuckerberg and Sheryl Sandberg avoid the same sort of exit that Uber's Travis Kalanick suffered? JL

Cale Weissman reports in Fast Company and Will Oremus reports in Slate:

With traditional digital advertising revenue flatlining, Facebook convinced (advertisers) video would be the next media
goldmine. Mark Zuckerberg said: “If you fast-forward five years most
content people see on Facebook and are sharing is video.”Media executives
overhauled budgets to embrace the trend and hired new teams. Layoffs ensued. Months after that, Facebook admitted it misreported key metrics. Now advertisers are suing,
claiming that the measurement error was much worse than Facebook let
on. Worse, Facebook knew of the error and covered it up.

Fast Company In April, 2016 Mark Zuckerberg said the following: “We’re entering this new golden age of video . . . I wouldn’t be surprised if you fast-forward five years and most of the content that people see on Facebook and are sharing on a day-to-day basis is video.” A little over a month later, according to a lawsuit, the company would follow up on complaints that it knew about about issues with its video metrics since 2015. Months after that, Facebook finally, very quietly, admitted that it misreported key metrics.

Now advertisers are suing over the company allegedly cooking the books and not disclosing this miscalculation. And media people are fuming about this development. Rightfully so: The media industry over the last two-plus years has been punctuated by an awful euphemism known as the “pivot to video.” With traditional digital advertising revenue flatlining, Facebook managed to convince online publishers that video would be the next media goldmine. The company jumped headfirst into the medium–changing its algorithm to favor moving images, while convincing both advertisers and publishers alike that a long-term, video-first strategy would be the answer to their revenue woes.
For advertisers, video was simply another way to reach eyeballs. For publishers, this was something different: Media executives overhauled entire budgets to embrace the new trend and hired new teams to make quick, consumable videos that would theoretically get them more ad revenue. Writer and editor positions were cut, and layoffs ensued. For over a year, new headlines abound about media brands diverting resources into platform-first content. No one really knew what was working in the pivot to video, but they were assured that if they followed the instructions, things would pay off.

Facebook should be in jail, obviously, but let’s not forget about all the smooth-brained media execs who bought into the pivot to video when literally every person who works on the ground in media, or even just uses the internet every day, knew it was complete bullshit.

All this, it turns out, was allegedly predicated on a miscalculation–inflated metrics that Facebook knew about long before the problem got fixed. The company, according to the lawsuit, adopted a “‘no PR’ strategy” to avoid admitting to this screw-up.
Facebook, for its part, denies that it ever knowingly reported false metrics. I reached out to the company for further comment and will update this post if I hear back.
In 2015, John Herrman wrote for the Awl about various editorial projects that platforms were playing around with, in an attempt to better control centralize the media ecosystem. The idea was to create apps and projects that would blur the line between platform and publisher. Though the move to video was only a whisper then, it was clear that a big change was on the horizon. He wrote:

Publications large and small but especially large spent the last few years in a sort of para-economy, watching their audiences and sometimes revenues explode as the result of informal partnerships with social platforms, which were happy to let these outsiders hustle to adapt all manner of writing and imagery and video to their new contexts. The self-pitying/aggrandizing explanation for the platforms’ annexation of media attention would be that the last few years represent a sort of free-booting period during which media gave Facebook no-strings content in exchange for attention, which was converted into revenue in a system of advertising Facebook was simultaneously intent on destroying.

And indeed Facebook did destroy it. What followed was media companies trying to regain their footing by following the platform’s lead.

It’s news like today’s that highlights the real-world impact of large tech platforms and their dominance over content distribution. While it’s true that the advertising ecosystem was shifting, it’s also true that hundreds of people lost their jobs, and it’s looking more and more like that was due to a business-model whim predicated on faulty metrics.
Advertisers are banding together now–trying to get monetary justice for the alleged damage Facebook caused–but what about those on the publishers’ side? Will they get their jobs back?

Slate

Once again, the media is righteouslyfurious with Facebook—this time, for allegedly misleading advertisers as to how many people were watching videos on the social network. The fury may well be warranted, the righteousness not so much.

The outrage centers on Facebook’s alleged deception of advertisers about a particular statistic having to do with video viewership. (Facebook admits it screwed up, but denies that it intentionally misled people.) But that tiff masks a deeper lie on the part of Facebook and publishers alike.

To understand why any of this matters, you have to rewind to 2015. That’s when Facebook executives, including CEO Mark Zuckerberg, were going around the world preaching the gospel of online video. Video, they said, was the future of Facebook and the future of media. Text and pictures were on the outs. Within five years, they said, Facebook’s news feed might be mostly video.

To back up its claims, Facebook touted impressive statistics that showed vast numbers of people were not only seeing video in their feeds, but pausing to watch videos for extended periods of time. That kind of data is catnip to online advertisers, who pursue mostly in vain any morsel of evidence that people are actually paying attention to the ads they spend so much money on.

As advertising budgets shunted toward video to tap the apparent Facebook viewership goldmine, publishers’ editorial budgets followed. Publications such as Mic, Vice, Mashable, and many others laid off writers and editors and cut back on text stories to focus on producing short, snappy videos for people to watch in their Facebook feeds.

One problem: Facebook’s numbers turned out to be all wrong. In 2016, the Wall Street Journal reported (and Facebook subsequently confessed) that the company had been seriously miscalculating multiple key metrics, including “Average Duration of Video Viewed.” The error: Facebook was only counting views longer than three seconds in its “average,” and thus completely ignoring the vast majority of people who were scrolling right past them.

That was 2016. So why are people mad about it again in 2018?

Because, this week, a group of advertisers filed a lawsuit claiming that the measurement error was much worse than Facebook let on. Worse, they allege, Facebook knew of the error way back in 2015—and intentionally covered it up. Internal Facebook documents cited in the suit show Facebook employees discussing a “no-PR” strategy to temporarily hide the mistake, and looked for ways to downplay its scope and “obfuscate the fact that we screwed up the math.” Not a good look! (For perhaps the best overview of the lawsuit and its implications, read Laura Hazard Owen’s story in Nieman Lab.)

The claims in the lawsuit are explosive. If substantiated, they will further erode trust in Facebook, which already has a reputation for hiding major screw-ups such as the Cambridge Analytica data leak. Specifically, they will erode advertisers’ trust in Facebook—which could have a more direct impact on the company’s bottom line than more generalized user or public mistrust.

Facebook denies any such cover-up of the measurement error. “This lawsuit is without merit, and we’ve filed a motion to dismiss these claims of fraud,” the company said in a statement. “Suggestions that we in any way tried to hide this issue from our partners are false. We told our customers about the error when we discovered it — and updated our help center to explain the issue.” Facebook maintains that the seemingly incriminating quotes by its employees have been taken out of context. It also argues the error didn’t really affect advertisers all that much anyway because Facebook wasn’t using the mistaken figures in its calculations of how much to charge them.

One can understand why advertisers feel wronged, regardless. But that doesn’t quite explain the level of outrage from members of the media when the Wall Street Journal reported on the lawsuit Wednesday. And it doesn’t explain why people seem so much angrier about this now than they did in 2016, when the measurement error first came to light.

To grasp that, you have to recall the way Facebook’s rosy claims about video viewership influenced not only advertisers, but publishers.

There’s a reason the phrase “pivot to video” still causes reporters to shudder: The staffing changes inspired by Facebook’s emphasis on video cost good journalists their jobs. In 2016, the fact that Facebook had been misrepresenting the viewership of video ads to advertisers didn’t necessarily seem like a huge deal to anyone other than advertisers. Fast forward to today and it’s clear the problems with online video ran deep. It turned out most people weren’t much more interested in watching editorial video content than they were in watching video ads. (There are exceptions, of course: Videos are ideal for conveying inherently visual content, including breaking news events, and can add an extra dimension to a story when used judiciously. People also really like watching food videos.) Earlier this year, Facebook itself announced that users will be seeing less video in their feeds. So much for Zuckerberg’s “golden age of online video.”

Some media companies pivoted back away from video, laying off a lot of the same folks they’d hired in their previous reorganizations. Some folded altogether. (Slate recently stopped producing original videos, though it did not lay off any staffers.) Brands were ruined, livelihoods lost, careers destroyed in pursuit of a geyser of video viewership that turned out to be a mirage. Add to that the allegation that Facebook knew all along it was a lie, and you’ve got some seriously pissed off journalists.

That’s understandable. No doubt Zuckerberg’s grand claims forced publishers to take note. But as a few timidly pointed out in the wake of the backlash, it also undersells the complicity of media companies and their backers in the misguided video pivot. The metrics Facebook presented to video advertisers, coupled with Zuckerberg and co.’s endorsement of video as the future of online media, probably influenced media companies’ decisions. But media companies were never the subject nor the main target of Facebook’s inflated numbers, and there’s no evidence that Facebook misled publishers as to how many people were watching their videos.

So forget the metrics misguidance for a moment. There was a big lie beneath the whole push to online video, but it wasn’t the one about average duration of videos viewed. The real lie was one in which both Facebook and the media participated. It was the one that said the push to video was about what people wanted.

The shift from text to video was never about what normal people wanted, for Facebook or the media companies that followed its lead. It was always about what advertisers wanted: the captive attention of consumers.

Since the dawn of the ad-supported internet, advertisers have suspected, known, secretly feared that no one was looking at their banner ads. That everyone was blocking their pop-ups. That ad blockers were rendering their messages invisible on more and more screens. Online video represented a new hope—the hope that pre-roll, mid-roll, and maybe even post-roll ads would interrupt editorial content so dramatically and unavoidably that people would have no choice but to watch. Facebook’s autoplay video feature (which Twitter copied) made this explicit: You literally couldn’t avoid watching video in your feed, even if you wanted to.

It was Facebook’s lie, but it was also the lie of every media company that pivoted to video on the pretense that it was somehow a better way to deliver their content. The notion is so patently disingenuous that it’s the subject of a famous Onion parody—which, by the way, predated Facebook’s measurement error. The lie persisted not only in the face of conventional wisdom, but ever-mounting evidence that supported the obvious conclusion: No one wants a video to start playing every time they try to read something online.

If there’s a lesson here beyond “don’t trust Facebook,” it’s that media companies are supposed to try to align their business models with their editorial goals—not the other wary around

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As a Partner and Co-Founder of Predictiv and PredictivAsia, Jon specializes in management performance and organizational effectiveness for both domestic and international clients. He is an editor and author whose works include Invisible Advantage: How Intangilbles are Driving Business Performance.Learn more...